Insurance Companies Vendor Requirements
The state of Colorado’s Division of Insurance released a “Notice of the Provisions Pertaining to the Payment of Claims for the Repair of Damaged Property” which restoration companies in Florida should be aware. Restoration companies in Florida would greatly benefit from such a change.
Colorado law states that insurance companies CANNOT force their insureds to use a particular repair facility. Colorado Statute 10-4-120 prohibits an insurance company or agent from telling an insured that if the insured does not use the insurance company’s recommended repair business, it could result in a nonpayment or delayed payment to the Colorado insured.
The statute provides a long list of items an insurance company is prohibited from doing, they can be reviewed at: Colorado Regulations Department of Insurance
Currently, Florida does not have similar requirements of an insurance company. Many times if an insurance carrier writes a policy with certain vendor requirements, the insurance company can at times require certain vendors be used.
Often times, water mitigation and restoration companies encounter situations where their clients, the homeowners, feel forced to use an insurance company’s vendor out of fear of their policy being cancelled or the claim being denied/unpaid. While this practice is not permitted by Florida’s Department of Insurance, it does happen.
If it was law, as per Colorado’s detailed statute, Florida restoration companies would have leverage against the insurance companies if they are removed from a job.
This is an excellent reason why restoration companies should get involved in fighting for their rights under the assignment of benefits and for advocating for more statutory requirements for insurance companies to abide by, the Colorado statute offers great suggestions for Florida law to model in this regard.
The Florida Association of Restoration Specialists (FLARS) is a group in Florida who aims to improve the business conditions for the restoration industry in Florida. FLARS works in Tallahassee throughout the year and legislative sessions to protect the restoration industry. You can find them at: http://www.flars.org/ for more information on their successful fight against the insurance companies!
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